Effect of Alberta’s pause on renewables

It appears that one of the biggest drawbacks from pausing renewable energy project approvals could be a decline in renewable energy investment in Alberta moving forward. Right from the start, the controversial moratorium tested investors’ trust in Alberta’s free-market electricity system. The lack of transparency and questions surrounding the reasoning for the pause and subsequent changes has led to serious misgivings about support for renewable energy development in Alberta.

Less trust among investors in Alberta’s free-market electricity system means they may turn their attention to other markets.

Then there’s the confusion that the pause and changes have created. The AESO is still in the process of putting together a proposal that could dramatically change how Alberta’s energy market is structured. That uncertainty, along with government recommendations for restructuring, have caused hesitation with investors.

There’s serious concern over how the Alberta energy market could be restructured to include “day-ahead” market elements rather than being a strictly real-time market. Day-ahead refers to a practice of charging consumers in advance for energy used the next day. The practice requires very accurate estimates for generation and demand. It’s extremely difficult for wind and solar generators to predict energy production, which makes operating in a “day-ahead” market challenging.

The market restructuring is most concerning for investors with projects that are already underway and based on how Alberta’s electricity market operates now.

New restrictions on renewable energy projects that were put into place during the pause are another issue. Already some projects have been terminated, including TransAlta’s Riplinger Wind Power Project that was canceled due to changes in where the wind farm could be located under the new restrictions.

What the Pause Means for Energy Consumers in Alberta

One thing that homeowners and business owners should note is that the pause doesn’t apply to small-scale renewable energy projects on private property. Property owners are still encouraged to engage in renewable energy projects like installing solar panels. These individual projects add up to help improve electricity supply and demand for a more stable electric grid. They are more important than ever now that it seems large-scale development may slow.

If investment in renewables does decline there could be an impact on where Albertans energy comes from and how much it costs. Gas will likely continue to be the biggest source of electricity and coal could continue to produce around 12% of Alberta’s energy. These resources tend to increase in cost over time, unlike renewables that have the potential to become more affordable as more energy is produced.

Of course, the pause has also created more confusion for consumers over how the free-market electricity system will work in the near future. It makes managing energy services more difficult, which can have a negative impact on how much a person pays for electricity.

There’s no confusion about how your energy is generated and where electricity comes from when you can create your own power with solar panels. A solar panel system also gives you price stability no matter how Alberta’s energy market is structured since the kilowatt-hour cost isn’t going to increase.

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